SAO PAULO--(BUSINESS WIRE)--Fitch Ratings has affirmed the following rating assigned to the senior secured pass-through notes issued by Brazil Loan Trust I (the issuer):
Brazil Loan Trust I Notes
-- USD661.9 million notes 'BBBsf'; Outlook Stable.
The transaction is a pass-through securitization of a 10-year amortizing loan originated by Bank of America N.A. (BofA) to the Brazilian State of Maranhao (rated 'BB+'/ Outlook Stable by Fitch). The loan is guaranteed on an unconditional and irrevocable basis by the Federative Republic of Brazil (Brazil, rated 'BBB'/ Outlook Stable). Fitch's rating addresses timely payment of interest and principal.
KEY RATING DRIVERS
The affirmation of the rating reflects (i) the credit quality of the guaranty provider, Brazil; and (ii) the credit quality of the main transaction counterparties. The affirmation also reflects the timely payments of interest due in January and July 2014.
Fitch affirmed the Issuer Default Rating (IDR) of Brazil at 'BBB'/ Outlook Stable on July 10, 2014.
Payments on the loan are made to a bank account at Wilmington Trust N.A. (IDR 'A-'/ Outlook Positive) as administrative agent. On the following day, funds are transferred to an Issuer account at the Bank of New York Mellon (IDR 'AA-'/ Outlook Stable) as indenture trustee to the notes. Payments are made under the notes immediately thereafter.
RATING SENSITIVITIES
The rating assigned to the notes is sensitive to changes in the credit quality of Brazil as guarantor on an unconditional and irrevocable basis. While Brazil's rating remains higher than the long-term rating of Maranhao, the transaction's rating will not be sensitive to the rating assigned to Maranhao. The transaction's rating is equivalent to the higher of Brazil's long-term or Maranhao's long-term rating.
Additional information is available at 'www.fitchratings.com'.
Sources of information: Transaction documents.
Applicable Criteria and Related Research:
--'Global Rating Criteria for Single- and Multi-Name Credit-Linked Notes' Feb. 19, 2014;
--'Global Structured Finance Rating Criteria' May 20, 2014;
--'Counterparty Criteria for Structured Finance and Covered Bonds' May 11, 2014;
--'Brazil Loan Trust I' (August 13, 2013);
--'Maranhao, State of' (June 5, 2014);
--'Brazil' (July 18, 2014).
Applicable Criteria and Related Research:
Counterparty Criteria for Structured Finance and Covered Bonds
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158
Global Structured Finance Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748821
Global Rating Criteria for Single- and Multi-Name Credit-Linked Notes
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=729785
Brazil
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=752350
Maranhao, State of
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=748424
Brazil Loan Trust I
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=715622
Additional Disclosure
Solicitation Status
http://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=843354
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